AM Best Affirms Credit Ratings of Members of Standard Insurance Group and Pacific Guardian Life Insurance Company, Limited

OLDWICK, N.J.–(BUSINESS WIRE)–AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a+” of Standard Insurance Company (Portland, OR) and its affiliate, The Standard Life Insurance Company of New York (White Plains, NY), together referred to as the Standard Insurance Group (The Standard). Additionally, AM Best has affirmed the Long-Term ICR of “bbb+” and the Long-Term Issue Credit Rating (Long-Term IR) of “bbb+” on the outstanding $250 million 5% senior unsecured notes, due 2022, of StanCorp Financial Group, Inc. (StanCorp Financial) (Portland, OR), the intermediate holding company of The Standard.

Concurrently, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a” of Pacific Guardian Life Insurance Company, Limited (Pacific Guardian) (Honolulu, HI). The outlook of these Credit Ratings (ratings) is stable. The Standard and Pacific Guardian are the U.S. insurance subsidiaries of Meiji Yasuda Life Insurance Company (Meiji Yasuda).

The ratings of The Standard reflect its balance sheet strength, which AM Best categorizes as strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM). The ratings also consider The Standard’s strategic role within the Meiji Yasuda organization.

The Standard has shown strengthening of its risk-adjusted capital, as measured by its Best Capital Adequacy Ratio (BCAR). The favorable trend for risk-adjusted capital over the past year is based on a combination of favorable earnings and a lack of dividends to StanCorp Financial. However, The Standard maintains a moderately risky investment portfolio with a high allocation to commercial mortgages, although AM Best recognizes that this is an area of expertise for the company and part of its overall business strategy. AM Best also notes that The Standard’s portfolio is very well-diversified and historically has performed well with very low delinquency rates. The Standard has a strong market presence in its core employee benefit and individual disability markets. The company has reported favorable premiums development, good earnings and a low level of volatility in its operating results. In addition, revenues and earnings are diversified for the organization through its asset management business segment.

The ratings of Pacific Guardian reflect its balance sheet strength, which AM Best categorizes as strongest, as well as its adequate operating performance, limited business profile and appropriate ERM. In addition, the ratings are enhanced by the financial strength of Pacific Guardian’s parent, Meiji Yasuda.

Pacific Guardian maintains the strongest level of risk-adjusted capitalization, as measured by its BCAR. Total capital has declined over the past few years due to dividends to its ultimate parent, as well as capital deployment to fund new information technology; however, this has had a minimal effect on its BCAR, due to the high level of absolute capital and consistently favorable earnings. Pacific Guardian maintains a leading market position in Hawaii’s temporary statutory disability income market, but the company is challenged to show meaningful top-line growth or revenue diversification due to its business and geographic concentrations. Earnings are anticipated to remain favorable, but margins will narrow in the near term as the company continues to make investments in its information systems and technology.

The Standard and Pacific Guardian maintain local-based ERM programs that are comprehensive and well-developed, and that address risks for each company alongside a coordinated group program with Meiji Yasuda.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

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Bridget Maehr

Associate Director

+1 908 439 2200, ext. 5321

Joseph Zazzera, MBA


+1 908 439 2200, ext. 5797

Christopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

Jim Peavy

Director, Public Relations

+1 908 439 2200, ext. 5644

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